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People who owe money benefit, because they are able to repay their loans in money that has less buying power.
People who own property only benefit from general inflation in value in that they may be able to borrow more against its value (not actually more in real value).
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During periods of inflation tax rates should?
during periods of inflation tax rates sholkd
During which of these time periods was there a period of inflation?
1982 to 1984
During periods of inflation why do suppliers may temporarily withhold goods that can be stored for long periods?
When faced with inflation, suppliers prefer to hold on to goods that will maintain their value rather than sell them for cash that loses its value rapidly.
Would the classical model of the price level be relevant if there is a great deal of unemployment in the economy and no history of inflation?
No - The classical model is only realistic during periods of high inflation, because the stickiness of nominal wages and prices rise. This results in the Aggregate Supply Curve shifting left to it's next long-run equilibrium level much more quickly than during periods of low inflation.
How does inflation affect saving and investing?
During periods of high inflation, investors generally try to preserve purchasing power by seeking returns that keep up with inflation. Equity (stock) markets generally perform poorly in periods of high inflation with the exception of stocks of companies that benefit from inflation (like commodity companies). The Dow Jones Industrials average was basically flat in the 1970's when inflation was high. Yields on fixed income securities (govt bonds and corporate bonds) usually rise with the corresponding increase in inflation since fixed income investors need a premium over the rate of inflation for a 'real' rate of return. For example, a bond investor that requires a 5% return in a 3% inflation environment will require 7% in a 5% inflation environment. The Investopedia link below has a basic article on this topic.
During periods of inflation tax rates should?
during periods of inflation tax rates sholkd
During which of these time periods was there a period of inflation?
1982 to 1984
During periods of inflation why do suppliers may temporarily withhold goods that can be stored for long periods?
When faced with inflation, suppliers prefer to hold on to goods that will maintain their value rather than sell them for cash that loses its value rapidly.
Would the classical model of the price level be relevant if there is a great deal of unemployment in the economy and no history of inflation?
No - The classical model is only realistic during periods of high inflation, because the stickiness of nominal wages and prices rise. This results in the Aggregate Supply Curve shifting left to it's next long-run equilibrium level much more quickly than during periods of low inflation.
How does inflation affect saving and investing?
During periods of high inflation, investors generally try to preserve purchasing power by seeking returns that keep up with inflation. Equity (stock) markets generally perform poorly in periods of high inflation with the exception of stocks of companies that benefit from inflation (like commodity companies). The Dow Jones Industrials average was basically flat in the 1970's when inflation was high. Yields on fixed income securities (govt bonds and corporate bonds) usually rise with the corresponding increase in inflation since fixed income investors need a premium over the rate of inflation for a 'real' rate of return. For example, a bond investor that requires a 5% return in a 3% inflation environment will require 7% in a 5% inflation environment. The Investopedia link below has a basic article on this topic.
Was inflation a big problem during the revolutionary war?
Inflation was a big problem for Americans during the Revolution
How does inflation affect farmers?
Effects of inflation on Farmers:The price of farm products goes up faster than costs. Costs lag behind prices of product received by the farmers. It has been observed in India that inflationary tendencies during war and post-war periods have helped farmers in paying off their old debts. Moreover, farmers are generally debtors and have to pay less in real terms, while the land revenue, taxes, etc., do not rise much. Thus farmers generally gain during the periods of inflation.
What happens to gold and silver prices during deflation?
During periods of deflation, all asset classes are sold and decline in value. However, Gold statistically does not correlate with either inflation or deflation. The related link investigates the issue in more depth.
What is inflation during colonial times?
british
What is lost during a period of inflation?
Dignity
Is it wise to save during inflation?
it can be wise if the inflation rate doesnt reach the extent to which the money has to be changed
When planning marketing startagies during times of inflation marketers must be aware inflation causes consumers to?
a
